Reliance forms U.S. theater chain

Indian co. makes ambitious exhibition play

MUMBAI — Reliance Entertainment, the largest player in Indian film, is making an ambitious play in the U.S. exhib sector.

Company, part of billionaire Anil Dhirubhai Ambani’s Reliance ADAG conglom, has quietly bought up cinemas across the U.S. and is poised to launch next month as a coast-to-coast mini-chain.

“It is important we are seen as an independent American chain, rather than an extension of an Indian company,” said Reliance Capital senior VP Anil Arjun.

Reliance, in which billionaire George Soros recently paid $100 million for a 5% stake, has 250 screens at 28 North American locations. These include sites in New York, New Jersey, Atlanta, Detroit, Chicago, San Jose, Los Angeles, Washington State and one at Union Station in Washington, D.C.

“We’ve been aggregating. We’ve bought long-term leases to small chains or mom-and-pop operations, not necessarily the best quality, but we are spending to improve that through things like improved A/C, sound systems and concessions,” Arjun said. Total cost of the acquisitions and refurbishments was not revealed.

Group is rebranding most of its Indian entertainment businesses with the moniker Big and will rename the U.S. sites Big Cinemas as their renovations are completed. Both refurbishments and acquisitions will continue in coming months.

Reliance Entertainment, which runs cinemas in India through its stock market-listed Adlabs subsidiary, also bought into Knoxville, Tennessee-based management company Phoenix Theaters, which will operate the U.S. chain and has set up a distribution company to license rights where that is useful.

Phoenix Theaters is headed by former Regal exec Phil Zacheretti.

Arjun says most of the sites are close to centers of ex-pat Indian and Asian populations. Company’s objective is not to force the pace of crossover by Bollywood movies but to play popular movies from a wider range of sources.

“Hollywood films will be the majority, but we could also show popular Chinese or Korean cinema,” Arjun said. “Hindi-language Bollywood films are currently all that America sees of Indian films. We will play Tamil and Telegu too.”

Although Reliance is an advocate of DCI-compliant systems in India, a country where lower-powered e-cinema is the dominant form of digital projection, Arjun says it will not rush to equip Big Cinema with digital. “We are evaluating the timing,” he said.

The new Big Cinema chain in the U.S. is bigger than Reliance Entertainment/Adlabs loop in India, where it runs 150 screens. It is expected to up that to 300 screens by the end of the year.

Reliance’s expansion into U.S. exhibition, which is likely to be followed by moves into other countries, is one of several efforts to diversify into the entertainment industry.

With major positions in telcos, broadband Internet, video, radio, movie production and post-production, parent Reliance ADAG has unveiled plans to bow up to 20 TV channels and is weeks away from launching India’s fourth satellite TV platform.

Move also underlines Indian companies’ growing appetite for international properties and influence.

Having conquered global steel, IT and auto sectors (Reliance’s corporate rival Tata this week agreed to buy Jaguar and Land Rover from Ford), Indian firms are now looking at entertainment.

Last November Indian exhib Pyramid Saimira bought the Richardson, Texas-based FunAsia cinema chain for an undisclosed sum.